Women have more opportunities in business today than at any time in history, yet the debate over why they don’t hold more leadership roles in corporate America continues without resolution.
Some say women need to put themselves forward more the way men do. Others argue that women, torn between the competing priorities of work and family, nearly always put family first. Entwined in those discussions is whether American companies or government can do anything to lessen the conflict inherent in those choices.
Both viewpoints are valid. But let’s be clear that generalizations can only take you so far in unraveling this complex problem. Individual women (and men) make individual choices based on their unique circumstances and ambitions.
We think it’s better to focus on a different “why”: Why should companies want more women in leadership roles?
That answer is much more simple: It’s good for business.
Data show that companies with women on their boards have a higher return on equity and better net income growth compared with those that don’t. A recent Credit Suisse report says companies in the top quartile — those with the highest percentage of women — outperformed those in the bottom quartile by 26 percent.
With hard numbers like that, you’d expect all companies to be actively mentoring more female junior executives and recruiting hard to find top women for their boards. Yet as female board numbers grow, it seems to be a closely held secret of select companies. A company that already has a woman on its board is likely to add more, according to a recent Forbes.com report, and that’s why the overall number of female board members is improving.
Companies that expect to see change by adding one token woman to an executive or board position are likely to be disappointed. But 30 percent creates the “critical mass” where a different perspective makes an impact. That’s why the Thirty Percent Coalition formed in 2011 to bring awareness to the nation’s top companies and encourage them to make it their goal by 2015.
Diversity shouldn’t be legislated; its value can only be understood and encouraged. In today’s increasingly competitive economy, where margins grow thinner and efficiencies ever harder to find, winning companies seek any factor that will give them an edge. Women in leadership is one of those factors. Once that is acknowledged, solving the original question should follow.
What is your company doing to capitalize on the opportunity women present?